SOLOCAL_Registration Document_2017

SOLOCAL, LOCAL DIGITAL PARTNER TRUSTED BY BUSINESSES 1.3 Overview of the sector

SEGMENTATION BY MEDIA The segmentation of Internet advertizing spending by media points to an increasing place for advertizing on mobile devices (Internet ads displayed on smartphones and tablets). Mobile advertizing in France grew by approximately 65% in 2016, and is expected to grow at an average of approximately 23% per annum between 2017 and 2020, driven by the rapid spread of devices and improvements in user experience. Over the same period, Internet advertizing on computers is expected to fall by about 4% per annum; advertizers are following consumers and are also turning to mobile devices. In France, mobile advertizing spending accounted for roughly 12% of total advertizing spending in 2016, and is expected to increase to around 27% in 2020. The chart opposite shows the past and future growth rates (estimates) of Internet advertizing per device in France for the years indicated.

71.7%

65.3%

31.3%

26.3%

23.2%

18.6%

11%

10.6%

10.4%

6%

8%

10.2%

Printed Directories

1

0

(3.3%)

(3.6%)

(4.6%)

(5.1%)

(7.3%)

(12.8%)

2015A 2016A 2017E 2018E 2019E 2020E

2

Mobile

Total Internet

Desktop

Sources: Zenith, Ad Expenditure Forecasts, December 2017.

3

KEY DRIVERS OF DEMAND 1.3.5

The Group believes that its digital offerings allow it to leverage a large number of positive trends in e-commerce.

DEVELOPMENT OF ADTECH Advertizing technology (AdTech) generally refers to the various types of analytical and digital tools used in advertizing. Through its programmatic platform offering, the Group integrates optimized and real-time bidding strategies into its Digital Advertizing products, making the AdTech market a reference market for its business. The advertizing software market, which includes media or advertizing campaign planning, media buying and selling, and ad operations, is expected to show significant growth. In particular, the Western European market is forecast by third-party market analyses to increase sixfold by 2021, growing at a CAGR of 44%. Key market drivers include the continued transition of media buying from legacy channels to programmatic channels, as well as increased adoption of workflow and data automation. The chart below shows advertizing software revenues in Western Europe, in billions of euros, on a historical basis in 2016 and 2017 and projected future revenues from 2018 to 2021, according to a third-party market study.

4

WEBSITE PENETRATION RATES The Group believes that its Website offering puts it in first position in the French website creation market, with some 450,000 websites to its credit. The Group plans to expand not only its entry-level offering, but also its high-end website offering by adding new options such as bookings, an e-commerce module and the Click & Collect function. The Group benefits from a favourable level of website take-up in France, the percentage of companies with a website having increased from roughly 58% in 2010 to approximately 67% in 2017 according to third-party market estimates. The chart below shows the penetration level of websites for companies in France from 2010 through 2017.

5

6

7

67% 68% 67%

64% 64% 65%

60%

8

58%

CAGR 16-21E 44%

15.4

10.5

2010A

2011A

2012A

2013A

2014A

2015A

2016A

2017A

7.3

% companies in France with a website

5.0

Source: Eurostat website stats

3.4

2.5

2016A 2017E 2018E 2019E 2020E 2021E

Western Europe Ad Software revenues ($bn)

Source: IDC-Worldwide Advertising Software

25

2017 Registration Document SOLOCAL